Friday, October 19, 2018

Today, U.S. Senator Kamala D. Harris announced the LIFT (Livable Incomes for Families Today) the Middle Class Act, legislation to provide middle class and working families with a tax credit of up to $6,000 a year—or up to $500 a month—to address the rising cost of living. According to one survey, 57% of Americans do not have enough cash to cover a $500 unexpected expense—meaning that a rent increase, medical bill, or child care expense could lead to a financial emergency.

“Americans are working harder than ever but stagnant wages mean they can’t keep up with cost of living increases,” said Senator Harris. “We should put money back into the pockets of American families to address rising costs of childcare, housing, tuition, and other expenses. Our tax code should reflect our values and instead of more tax breaks for the top 1% and corporations, we should be lifting up millions of American families.”

The LIFT the Middle Class Act would:

Provide up to $6,000 a year per family, in the form of a refundable tax credit.

Tax credit applies to households earning under $100,000 annually.

Tax credit provides up to $3,000 for single filers earning under $50,000 per year.

The tax cut can be accessed each month or at the end of the year.

Families can receive up to $500 per month.

Individuals can receive up to $250 per month.

The Institute on Taxation and Economic Policy estimates the LIFT Act would impact one in every two workers and two out of every three children in America. In addition, ITEP estimates approximately 1 million Pell Grant eligible students would qualify for the credit of up to $3,000.

"Americans want a tax system that's fair, and they're tired of seeing benefits go to the wealthy and corporations while everyone else struggles to get ahead. We need real action to provide financial relief to the working and middle-class, which is exactly what this bill does.” –Natalie Foster, Co-chair of the Economic Security Project

“Despite the low unemployment rate, millions of Americans still face the spectre of economic insecurity. One surprise expense — one family or medical emergency — is often all it can take to knock a happy household into a financial tailspin. The LIFT the Middle Class Act goes a long way to rectifying this problem, ensuring the majority of working households, up and down the income ladder, have a steady stream of resources for transitioning through turbulent times. The Act builds on the growing mountain of evidence demonstrating cash — money — is often the single best tool policymakers have meeting the diverse and varied needs of households. This Act should be seen as a true tax cut for the average American, putting money into worker's pockets to spend on the things they need and care about, rather than what a distant bureaucracy thinks is best. As an economist, the Act also excites me as a tool for ensuring demand stays high in the face of another recession, thereby helping to buoy the economy as a whole.” – Sam Hammond, Director of Poverty and Welfare, Niskanen Center

“Instead of doubling down on lavish tax cuts for people who should be paying more--not less--in taxes, we should be advancing ideas like these to raise incomes for working people.” – Indivar Dutta-Gupta, Co-Executive Director, The Center on Poverty and Inequality, Georgetown Law

“The federal tax code is perhaps the most powerful tool of economic policymaking. It can impose economic burden and stimulate economic power. This remarkable bill recognizes the increasing economic challenges faced by ordinary Americans and uses the tax code to more fairly spread our nation’s prosperity to the families that need it most. It marks a break from a tax code that spends one-third of $500+ billion dollars allocated for asset promotion through tax savings and subsidy on those earning over $1 million a year, while bottom 60 percent of earners receive less than five percent of this allocation. And certainly a break from the Republican passed Tax Cuts and (so-called) Jobs Act, which will spend close to $2 trillion dollars over the decade largely on corporate interests based on some fickle notion that it will “trickle down” to the rest of us.” – Darrick Hamilton, Professor of Economics and Urban Policy, New School of NY

“A decade later, American families have not recovered from the Great Recession and are in a state of emergency with respect to their economic health. The sharp decline in the unemployment rate masks the presence of stagnant wages and the fact that the typical middle income family cannot cover an additional $500 in expenses without taking on more debt. Senator Harris’ plan will bring much needed relief and support to the nation’s beleaguered middle income families.” – William Darity Jr., Ph.D., Samuel DuBois Cook Professor of Public Policy, Duke University

“This is a brilliant approach as we know that all essentials for living a standard quality of life are increasing while salaries are stagnated. Most middle-class families cannot afford to live where they work or the rising cost of education for their children so this welcome relief will help to ensure they can have a shot at realizing the American dream. Thank you, Senator Harris, for caring about working families.” – Alice Huffman, President, CA NAACP